Example 1
Mrs. J. is in a nursing home paid for by Medicaid and her brother dies, leaving her $250,000. With this sum of money, Mrs. J is no longer eligible for Medicaid and must use the $250,000 to pay for her nursing home and medical care. This is commonly referred to as ‘spending down’ to qualify for Medicaid. Even if she gave the money away, Medicaid rules would not allow her to be eligible for a period of years from the date of the gift.
Example 2
Mr. S., age 35, has been disabled all of his life. Due to his disability, and with no assets to his name, Mr. S. receives benefits under Medicaid and SSI. His mother dies and in her will she leaves substantial assets to Mr. S. With these assets in his name, Mr. S no longer qualifies for these public benefits and will not qualify until his mother’s estate is exhausted. Even if his mother left her estate in trust for her son, the assets in the trust may disqualify the son unless the Trust complies with federal and state laws applicable to a special needs trust.
Example 3
Ms. H., age 28, is in an automobile accident and becomes completely disabled. She now relies on Medicaid and SSI for her basic needs. The accident was not her fault and her attorney files suit against the party at fault, prevailing in a jury verdict for damages of $500,000, net of attorney’s fees. The amount is paid directly to Ms. H. The same situation as Example 2 occurs, rendering Ms. H ineligible for Medicaid until this amount is depleted below the prescribed limits for eligibility.
